According to a new report from Texas A&M University, the American Lamb Checkoff Program has significantly elevated the annual value of American lamb, achieving notable success despite the relatively modest funding allocated for promotion.
“The purpose of the Lamb Checkoff has been to increase demand for American lamb,” said American Lamb Board (ALB) Chairman Jeff Ebert in a statement. “The results of this study confirm that despite a small budget, ALB’s promotional efforts have successfully resulted in increased demand for lamb.”
According to the study, “Return on Investment in the American Lamb Checkoff Program,” lamb consumption increased from $1.17 billion to $1.31 billion. The surge was credited to ALB’s promotional efforts, leading to average annual growth ranging between $58.7 million and $62.4 million.
The study revealed the Lamb Checkoff program spends minimal funds on lamb promotion compared to the annual revenue generated from lamb sales, with just 4.3 cents spent for every $100 in retail revenue. Additionally, the research delved into income-related lamb demand, finding a correlation where a 10% increase in income led to a 2.7% rise in lamb demand.
It also found beef prices were identified as a significant factor influencing lamb demand, with a 10% increase in beef prices resulting in a 6.8% surge in lamb demand. The study also looked at the price increase for other proteins and found demand increases on a smaller scale. A 10% increase in pork prices resulted in a modest 1.2% lamb consumption. Lamb consumers do not consider poultry a substitute.
The Texas A&M study highlighted the cost-to-benefit ratio as another significant measure of the checkoff program’s impact. It revealed that industry stakeholders gained approximately $16.60 for every $1 invested in promotion. Moreover, the study indicated that for each dollar not contributed by stakeholders and consequently not utilized for lamb promotion, industry stakeholders missed an average of $16.60 in potential additional revenue.
The last study conducted by Texas A&M was in 2019, and it showed that the cost-to-benefit ratio was $14.20 for every $1 invested. — Charles Wallace, WLJ contributing editor
